Dummies Guide

In 1997, Microsoft et al. lobbied to reduce Washington State’s Royalty Tax from 1.5% to .5%, a threefold reduction. This wasn’t low enough. The company decided to open a small Reno, Nevada office to dodge the tax completely.

Watching Hunter, Gregoire and the Democrats cater to Microsoft rather than repair our unfair tax system (Microsoft’s recorded more than $579 billion in revenue since 1998) was the last straw for me. This is one of the key reasons I’ve left my job to help launch Initiative 103 in Seattle and gather signatures to place it on the ballot. I103 would make corporate spending on elections illegal in Seattle and restrict corporate lobbying to public forums.

Microsoft tells journalists privately that we’re publishing misinformation but when confronted publicly to release its Royalty Tax payments from 1998-2010 it has refused to.

“Well, the principle focus of discussion inside the company and with people in state government here at times has been both the focus on revenue generation for the State of Washington and job creation in the State of Washington. And, obviously the company did make a decision, I’m not remembering exactly how many years ago to put Microsoft Licensing Incorporated in Nevada, in part to recognize the lower tax rate[sic – Nv. tax rate is zero] that was in place there. And, there have have been times when people in state government have mentioned to us the issue of whether we might move that back to the state of Washington. The reality is that in the scheme of things the impact is not very significant either for the company or for the state either the state government or the state economy.”

Few Seattle residents know about this because The Seattle Times has never reported this story. After a year of trying, I landed a meeting in November 2010 to detail Rep. Hunter’s actions to five Seattle Times journalists and Executive Editor David Boardman. While Boardman expressed interest in reporting the story, the paper never followed through. Microsoft has never disputed any specific facts that we’ve reported.